Question
On January 1, 20x1, Bright Co. Acquired 75% interest in dull co. For P180,000. on this date, the carrying amount of dull's net identifiable assets
On January 1, 20x1, Bright Co. Acquired 75% interest in dull co. For P180,000. on this date, the carrying amount of dull's net identifiable assets was P160,000, equal to fair value. Non controlling interest was measured at a fair value of P60,000.
The financial statements of the entities on December 31, 20x1 show the following information:
Bright Co. Dull Co.
ASSETS
Investment in subsidiary ( at cost )180,000-
Other assets600,000235,000
Total assets780,000 235,000
LIABILITIES AND EQUITIES
Liabilities70,00025,000
Share Capital600,000100,000
Retained Earning110,000110,000
Total equity710,000210,000
TOTAL LIABILITIES AND EQUITY780,000235,000
Bright CoDull Co
Revenues300,00080,000
Operating expenses(60,000)(30,000)
Profit for the year 240,000 50,000
Additional Information:
- No dividends were declared by either entity during 20x1 and there were no inter-company transactions.
- However, it was determined by year-end that goodwill was impaired by P10,000
Requirement: Make a draft of the December 31, 20x1 consolidated statements of financial position and consolidated statement of profit loss.
Problem 3: EXERCISE
1. On January 1, 20x1, Day Co. Acquired 75% interest in Night Co. For P216,000. on this date, the carrying amount of night's net identifiable assets was P192,000, equal to fair value. Non-controlling interest was measured at a fair value of P72,000
Day Co. Night Co.
ASSETS
Investment in subsidiary ( at cost )216,000-
Other assets 720,000282,000
Total assets 936,000 282,000
LIABILITIES AND EQUITIES
Liabilities84,000 30,000
Share Capital720,000 120,000
Retained Earning132,000 132,000
Total equity710,000 210,000
TOTAL LIABILITIES AND EQUITY936,000 282,000
Day Co. Night Co.
Revenues 360,00096,000
Operating expenses(72,000)(36,000)
Profit for the year288,00060,000
Additional Information:
No dividends were declared by either entity during 20x1. There werenointercompany transactions during the period.
However, it was determined at the year end that goodwill is impaired by 8,000
Requirement: Make a draft of the December 31, 20x1 consolidated statements of financial position and consolidated statement of profit loss.
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Financial Accounting with International Financial Reporting Standards
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
4th edition
1119504309, 1-119-50340-8, 9781119503408 , 978-1119504306
